When Democrats speak publicly about Social Security reform, they raise two canards, one involving the deficit, the other involving risk. In reality, says economist N. Gregory Mankiw, writing in the New Republic, there are no transition costs to be borne -- the amount of money diverted from Social Security will be recovered dollar for dollar by lower payouts in the future -- and individuals can choose the level of risk they are willing to bear. Individuals can pursue low-risk, lower rates of return or even choose not to opt into the program at all.

The real resistance to private accounts is three-fold, says Mankiw:

Democrats do not want to give a political victory to President Bush, but instead deal him a calamitous defeat that would undercut his ability to set a domestic policy agenda.

Over the long-term, private accounts would undermine the Democrats' view that "evil" capitalists oppress their workers; workers would have a stake in the economy and corporate performance, increasing support for the Republican party.

Democrats believe that, while the elites can take care of their retirement in such a system, the general public should not be trusted to do what is best with their money.

We need to fix Social Security's funding problem, says Mankiw, and that will require hard choices. But we should also make it a better system for future generations. Moving the system gradually from defined-benefit to defined-contribution would be a good step, giving people more choices and the government greater transparency. The funding problem is the catalyst for reform, but the nation should take this opportunity to give all Americans a reliable retirement system.